Izzy Switt, King Farouk and the 1933 Double Eagle

THE BEGINNING
At the turn of the 20th century, President Theodore Roosevelt commissioned sculptor Augustus Saint-Gaudens to design what he hoped would be one of the most beautiful coins ever created – a gold Double Eagle (worth twice its $10 counterpart that also featured an eagle).

And beautiful it was, with Lady Liberty marching out of a blast of celestial light on one side and a giant, furious eagle skimming the surface of the sun on the other. Roosevelt was so thrilled with the design he grandly overruled the Mint’s complaints that the coin would be a monumental pain to produce, supposedly demanding that they “begin the new issue, even if it takes you one day to strike one piece!”

It went into production in 1907, Roosevelt deciding to leave off the “IN GOD WE TRUST” motto due to his alleged concern that criminals would be drawn to the coin’s irresistible beauty and – by handling it – sully God’s name with their delinquent fingers. The public made such a fuss once they realised the motto’s absence that Congress insisted it be included on all future iterations of the coin.

So it was, until 1933, when a different Roosevelt (Franklin Delano; vague relation) was President. He too issued a grand pronouncement – that no further coins would be made from gold, and that gold would be illegal to own in any other form than pre-existing collector coins.

No 1933 Double Eagles were ever released, but FDR wasn’t quick enough (not a polio joke) to halt the Philadelphia Mint’s production of 445,000 coins that it would never be possible to use. Instead, they were reportedly locked behind the triple steel doors of a vault before being brutally melted down into bullion and incarcerated at Fort Knox in 1937. Only two Double Eagles escaped to the relative comfort of the Smithsonian.

IZZY SWITT AND THE KING OF EGYPTThat should have been the end of the story, were it not for an enterprising reprobate by the phenomenal name of Izzy Switt. Israel Switt was a morally flexible Philadelphia jeweller with a plethora of connections to employees at the local Mint, connections he somehow exploited in order to get his hands on a small horde of 1933 Double Eagles.

While the impounded coins were being melted down in 1937, Izzy Switt began touting those he’d rescued to his network of shady numismatists. One went to a Texan dealer, who in 1944 managed to sell it on to the moustachioed magpie of the Middle East: King Farouk of Egypt. Farouk was a fervid collector of coins (he had around 8,500), and just about everything else in existence: Fabergé eggs, antique aspirin bottles, paperweights, postage stamps.

Eager to go through official channels to authenticate his purchase, Farouk applied to the US Treasury Department for an export license for his new coin. The US Secret Service were still days away from discovering that the coins had been stolen in the first place, so the Treasury Department blindly went ahead and granted Farouk his license. (Once they’d realised their mistake, the Treasury’s subsequent attempts to sheepishly retrieve their coin via diplomatic channels were short-lived amid the chaos of World War II).

An embarrassingly brief period of time later, the Secret Service caught wind of a second Double Eagle being auctioned off by New York rare coin dealers Stack’s Bowers and confiscated the item before anyone had had a chance to bid on it. This prompted an investigation that continues to this day – a concerted state-backed attempt to round up and destroy every illegitimate Double Eagle in existence.

After 10 months they’d established that Izzy Switt had most likely fenced the coins for a crooked Mint cashier, although under questioning Switt appeared to be suffering from a very fortuitous type of amnesia that meant he had completely forgotten where he’d gotten his haul. In 1945, Izzy Switt was saved from prosecution by the statute of limitations.

Meanwhile it transpired that one of the few things King Farouk was unable to collect was the support of the Egyptian public; he was overthrown in a coup d’etat in 1952, his belongings seized and put up for sale in a public auction run by Sotheby’s in Cairo. As soon as the US government realised what was going on (their source: the auction catalogue) they put in a polite request for the return of their coin, and the Egyptian government politely agreed to give it back. That’s when the 1933 Double Eagle was abruptly withdrawn from the auction and mysteriously disappeared. It wouldn’t be seen for another 44 years.

THE COIN DEALER AND THE SECRET SERVICE
In 1996, coin dealer and chairman of the British Numismatic Trade Association Stephen Fenton was in a hotel room at the Waldorf Astoria, about to sell a coin he had bought for $210,000 to a man named Jasper Parrino for $850,000. Parrino, in turn, had arranged to sell the coin on for $1.65m to a Texan collector named Jack Moore, who had brought along his own expert to authenticate the coin. “His hands were shaking quite a lot,” says Fenton. “I thought he might try to steal it. I was afraid someone was going to come bursting into the room with guns.”

Which is precisely what happened; Moore had tipped off the authorities and was helping them pull off an undercover sting. At the appropriate moment, a bevy of Secret Service agents who had been stashed away in the next room exploded through the door, waved their guns around, threw Fenton and Parrino to the floor and arrested them.

Fenton explained that he had obtained the 1933 Double Eagle (for it was just such a coin) through an Egyptian jeweller whose client had links to the military. “I was buying quite a few coins out of the Farouk collection,” said Fenton. “This came along, and it was quite nice. It did have an aura.” The Farouk Double Eagle – the only one to slip through the net – had resurfaced.

After charges against him for “conspiring to convert to his own use and attempt to sell property of the United States” had been dropped, Fenton became embroiled in a five-year legal battle as the US Government tried desperately to confiscate the coin from him. But just four days before the case was due to go to trial, Fenton managed to strike an unusual deal: the coin’s ownership would revert to the US government at which point it could be auctioned off and the profits split 50/50 between Fenton and the US Treasury. As a result, the coin was moved from a Treasury vault in the World Trade Centre in July 2001, just two months before the September 11 attacks.

Farouk’s 1933 Double Eagle sold for $7,590,020 on July 30, 2002 – that $20 on the end there being the fee paid for ‘monetising’ the coin so it would become legal tender (and, by extension, legal to sell). The anonymous bidder never claimed his prize; instead, he immediately lent the coin to the American Numismatic Society. It has been displayed at the Federal Reserve Bank of New York ever since – the only 1933 Double Eagle to ever be legally bought or sold.

THE RETURN OF IZZY SWITT
Two years later, Izzy Switt unexpectedly reared his head again. This time it was in the form of his daughter, Joan Langbord, who claimed to have found 10 hitherto-unheard-of Double Eagles in a Philadelphia safe deposit box owned by her family. Hoping for a similarly lucrative deal to the one Fenton had made, Langbord happily turned her father’s coins over to the Secret Service so that they could be declared authentic.

And they were indeed declared authentic. At which point the Mint cleverly decided not to give them back, telling Langbord that “these Double Eagles were never lawfully issued, but instead, were taken from the United States Mint at Philadelphia in an unlawful manner more than 70 years ago.”

Langbord was understandably miffed, and has been arguing her case for the last decade, in the face of stiff opposition from the Mint and various branches of the judiciary. It seems she finds herself in an unfortunate double bind, having failed to take into account the rather unique circumstances surrounding the accidentally-legitimised Double Eagle that once belonged to King Farouk of Egypt.

Now, Langbord prepares to take her case all the way to the US Supreme Court, determined to overturn FDR’s decree that all of the rarest examples of one of the most beautiful coins in the world be destroyed.

James is freemarket’s Chief Commercial Officer. He has a history of finding new ways to solve age-old financial challenges and was responsible for launching some of the first online money transfer and prepaid card initiatives in Europe.